Gasoline Prices Fall to 4-Month Low

The average price U.S. drivers paid for gasoline fell to the lowest level in more than four months, the government said Monday, and more savings could be on the way as Tropical Storm Ernesto waned as a threat to oil-producing areas in the Gulf of Mexico.

The average national price for self-serve regular gasoline dropped 7.9 cents in the last week to $2.845 a gallon, according to the federal Energy Information Administration’s weekly survey of 800 service stations.

That’s the lowest level since April 17 but up 24 cents from a year ago, the Energy Department’s analysis arm said. Pump prices have fallen 15.5 cents in the last two weeks.

In California, the average price declined 6.4 cents to $3.098 a gallon. The last time California gas was that cheap was late June. The price is still 33 cents higher than a year ago.

The sharp drop in pump costs reflects declining crude prices and above-average motor fuel inventories.

In New York futures trading, crude oil, gasoline and natural gas sank Monday on news that Ernesto was forecast to stay away from oil wells in the gulf.

After falling as low as $70.15 a barrel, light sweet crude for October delivery settled at $70.61, a decrease of $1.90 on the New York Mercantile Exchange.

In other Nymex trading, gasoline futures fell more than 11 cents to settle at $1.783 a gallon and natural gas futures declined 68.5 cents to settle at $6.472 per 1,000 cubic feet. In addition, heating oil futures slid 6.39 cents to settle at $1.966 a gallon.

The lower crude prices, which account for more than half the cost of making gasoline, are likely to be passed on to consumers at the pump.

Gasoline prices are expected to keep falling over the next few weeks as demand eases after the summer driving season.

Despite the high prices, gasoline use this summer has been brisk. U.S. demand for gasoline was 0.7% lower in June than estimated but was up 0.6% from a year earlier and reached the highest-ever level for June, the EIA said Monday.

Demand for the most widely used petroleum product was 9.44 million barrels a day in June, the highest since August 2005, but 66,000 barrels lower than estimated, EIA data showed.

In the EIA’s latest weekly gasoline survey, West Coast service stations had the most expensive gasoline by region, with the price down 5.7 cents to $3.041 a gallon.

Los Angeles had the highest pump price among cities at $3.132 a gallon, down 6.5 cents.

The cheapest gasoline was found on the Gulf Coast at $2.736 a gallon, down 8.3 cents. Cleveland had the best pump price among cities at $2.626, down 13 cents.

Separately, the agency said the price truckers paid for diesel fuel fell 0.6 of a cent in the week to $3.027 a gallon, up 44 cents from a year ago.

The Rocky Mountain region had the most expensive diesel at an average $3.346 a gallon, down 0.3 of a cent. In California, diesel cost an average $3.20 a gallon. The lower Atlantic states had the cheapest diesel at $2.897, up 0.7 of a cent.